As we head into 2020 and take a look back at the past decade, many would-be investors will necessarily be suffering from a latent case of FOMO. It’s not the fear of missing out, it’s the knowledge of already having missed out.
Why didn’t you bet on Bitcoin way back when? Or couldn’t you see that Netflix was going to trounce the tech world and start a major streaming war? Did you really think all those geopolitical fits and starts that few really understand were going to upend the S&P 500? Did you really think Trump was going to kill the market with his trade wars?
They didn’t. He didn’t. Nor did anything that happened under Obama.
The market has had a wildly successful bull run, and the only question now is when it’s going to stop because all good things must come to an end. Now, FOMO is being replaced with that nagging feeling that after a decade of major earnings, betting the house on everything you missed might backfire.
The Bitcoin Luxury Cruise That Has Already Sailed
Bitcoin was the best overall investment of the decade to the point that $1 would have made you a cool $90,000, according to Bank of America Securities.
Two years ago, Bitcoin hit $20,000, minting a brand new class of millionaires, while most were left scratching their heads on ethereal confusion.
Now it’s hovering at around $7,400, but even if you’d held onto it after it hit $20,000 and then started nose-diving, you’d still have seen a massive return on investment because a decade ago a single bitcoin cost a fraction of a penny.
Even if you’d bet on bitcoin at this time last year, you’d be sitting pretty. At $3,700 on New Year’s Eve 2018, bitcoin would have given you a return on investment of over 97% today–far better than the S&P 500 or the DOW.
Not many have the stomach for this intangible investment, but Millennials do–and going into 2020, surveys show that they trust the cryptocurrency even more than they do Berkshire Hathaway of legendary investor Warren Buffett.
What You Missed on the S&P 500
Any decent bet on an S&P 500 Index ETF would have netted you major returns as you head into 2020.
This year alone, the S&P 500 has returned around 30%.
Over the past decade, the S&P 500 has returned over 200%, with the DOW pretty much the same.
Netflix was an investor’s decade-long dream. The streaming giant earned investors an over 4,000% return since 2010, making it the best performer on the S&P 500, hands down.
If you’d invested $1,000 in Netflix in 2010, you would have made over $43,000.
Today, Netflix has a market cap of around $144 billion and is one of the 40 most valuable companies in the world. But is it still a fantastic buy? This isn’t 2010 anymore, and Netflix now has a lot of competitors in a streaming war that’s entered its bloodiest phase.
And a handful of other stocks have also rewarded shareholders with 1,000%+ returns, including Amazon with about 1200%.
Or, there’s the Lending Tree (NYSE:TREE), for which $1,000 would have turned into over $34,000. The same investment in Domino’s pizza would have earned you even more: over $39,000.
And while lots of smart money is now flowing into safe haven gold simply because the bull run has gone on for too long, the contrarian thought is that the real bull run didn’t start a decade ago–it started this year, so it’s still got plenty of stamina.
In a recent note to clients, Leuthold Group’s Jim Paulsen examined the correction of late last year from the perspective of a bear market, arguing that this year’s rally was actually ‘post-bear’, not bull.
“So far, from the ‘correction’ last year, this year’s U.S. stock market rally is nearly on par with the average post-war, first-year bull run,” Paulsen wrote.